Indian airlines to add new jets in booming aviation market
Fri Mar 09 2018
Rajesh Sharma (1997 articles)

Indian airlines to add new jets in booming aviation market

HYDERABAD (Reuters) – Indian airlines Jet Airways (JET.NS), SpiceJet Ltd (SPJT.BO) and AirAsia India are planning to add new jets to their fleets as they look to expand in the world’s fastest-growing aviation market, the carriers said on Thursday.

Domestic Indian passenger traffic increased by 17.9 percent in January from a year earlier, marking the 41st consecutive month of double-digit growth, the International Air Transport Association said in a monthly update released on Thursday.

Civil Aviation Secretary Rajiv Nayan Choubey said as long as oil prices remained below $ 80 per barrel, he expected the Indian aviation market to grow at a compound annual growth rate of 15 percent for the next 20 years or so.

“We are committed to ensure that new airports are built, better air space management services are provided, so that there is no congestion in the skies,” Choubey said at the Wings India airshow.

Indian airlines are scrambling to add more jets to meet demand for more domestic and international flights, making it one of the most targeted sales markets for jet manufacturers Airbus SE (AIR.PA) and Boeing Co (BA.N).

“The growth of the domestic Indian (aviation) market is the highest in the world,” Boeing Senior Vice President Asia Pacific and India Sales Dinesh Keskar said. “Every segment of traffic in and out of India is going to grow for the next 20 years.”

Boeing said in July it expected Indian airlines to order up to 2,100 new aircraft worth $ 290 billion over the next 20 years, calling it the highest-ever forecast for Asia’s third-largest economy.

Jet Airways hopes to close a deal to buy another 75 narrowbody jets by the end of March, its CEO Vinay Dube told reporters on the sidelines of the airshow.

The airline last year finalised a deal to buy a separate 75 Boeing 737 MAX aircraft and said it was in “serious talks” for 75 more.

Dube said it would finalize the deal with one of the plane manufacturers, alluding to Boeing or Airbus.

AirAsia India is looking to expand its fleet to 60 jets from the current 14 over the next five years, a spokeswoman said. The airline’s parent, AirAsia Bhd (AIRA.KL), said in January it was considering an IPO of the Indian arm.

SpiceJet’s Chairman Ajay Singh said his airline was studying the feasibility of Boeing’s and Airbus’ jets for longer haul international destinations, including western Europe and United States, as it looks to expand beyond short-haul international routes.

When asked if a new middle-of-the-market jet that Boeing is studying would fit the bill for cost effective long-haul travel, Singh said: “conceptually it sounds interesting”.

In July, SpiceJet had signed a provisional deal to buy 40 Boeing 737 MAX 10 jets.

He also said the low-cost carrier was close to announcing an on board Wi-Fi facility on its flights, which would offer in-flight entertainment including streaming movies, cricket and as well as shopping.

The move, which could boost SpiceJet’s ancillary revenue, is likely to come by April, he said.

Separately, Bloomberg on Thursday reported IndiGo, India’s biggest airline, plans to order as many as 50 Airbus A330 wide-body jets, citing people with knowledge of the matter.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.